Welcome to Shoprite Sixty60: Beyond Checkers!
The Shoprite Group is set to introduce its cutting-edge on-demand grocery delivery service, Sixty60, at 19 Shoprite locations across eight provinces, following a successful pilot in Gauteng and the Western Cape.
Sixty60 is currently available at 601 locations within its Checkers store network. Over the past six months, it has expanded by adding 96 new locations, which includes 38 Checkers Hypers. However, penetration across the overall store network appears to have plateaued, as all stores are equipped with Sixty60, with Checkers, Checkers Hyper, and Checkers Liquorshop collectively accounting for 637 outlets.
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Read: How Sixty60 is transforming Checkers into a formidable player.
Achieving 100% coverage of Sixty60 across all stores in the near future seems unlikely, as certain locations face restrictions in setting up a fleet of delivery bikes (due to negotiations with landlords), and some stores are located in regions already serviced by nearby larger stores.
The recent expansion of the general merchandise category at Checkers Hyper to Sixty60 has boosted the service over the last six months of 2024, though it has necessitated additional growth capital expenditure.
Listen/read: Sixty60’s transformation: Rapid expansion from groceries to gadgets.
It was always part of the group’s strategy to extend Sixty60 to the Shoprite brand and store network, albeit only where it’s feasible.
The recent acquisition of the remaining 50% stake in the Pingo joint venture with RTT late last year would have certainly been influenced not only by the insights gained from the Checkers network but also by the opportunities recognized within the Shoprite brand.
(As for Sixty60, it has yet to penetrate some of its new ‘adjacent’ businesses, particularly Petshop Science and Little Me. On-demand clothing through Uniq by Checkers may be more of a challenge.)
The group has indicated that owning Pingo fully provides it with “strategic control of the end-to-end customer experience” regarding deliveries.
Phased rollout
The group emphasizes a phased rollout of Sixty60 across the Shoprite brand to “ensure that each new location maintains the excellence and efficiency synonymous with Sixty60.”
Neil Schreuder, Shoprite Group’s chief of strategy and innovation, expressed enthusiasm about launching Shoprite Sixty60 in places where it can genuinely benefit consumers seeking the convenience of home delivery, provided that the logistical framework supports a seamless experience. The latter part of this statement is particularly significant.
The pilots at Shoprite Atlantis near Cape Town and Shoprite Jabulani in Soweto undoubtedly yielded insightful results that will guide the service’s rollout process.
Later this month, Shoprite Kleinmond in the Western Cape and Shoprite Kriel in Ga-Nala, Mpumalanga, will be added to the service.
These two locations, along with the two pilot sites, are highly relevant as they are situated in outlying areas that lack a nearby Checkers store.
The nearest Checkers to Kleinmond is located in Hermanus, with no stores in between until Gordon’s Bay. At Ga-Nala, which is situated deep in Mpumalanga’s coal belt, the Shoprite store is near the Kriel and Kendal power stations, with Checkers stores in Emalahleni (Witbank) and Middelburg approximately 50km away.
It’s worth noting that the group possesses robust data from its Xtra Savings rewards program.
This data allows the group to identify which customer profiles shop at specific Shoprite stores within various communities, track buying trends throughout the month, and determine which stores have a larger share of more traditional ‘middle-income’ customers who lack access to a nearby Checkers store.
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Read:
Can anyone challenge Checkers Sixty60? (Hint: No)
How profitable is Checkers Sixty60? (Is it even?)
It is highly unlikely that Sixty60 will be implemented in even a quarter of Shoprite’s 1,150 stores (including supermarkets and Liquorshops). A target of around 100 rollouts seems reasonable in the medium term. It is almost impossible that Sixty60 will ever be introduced at Shoprite Nongoma in Zululand, for example.
Growth moderating, sales increasing
Growth within the Sixty60 service is showing signs of moderation, with sales rising by 47% between July and December over the previous year. In contrast, a year ago, sales growth was recorded at 63%.
The group reports it has generated over 14,000 jobs since the service’s inception.
Sixty60 now offers as many as 23,000 grocery and liquor products, along with an additional 10,000 general merchandise items available at locations featuring a Hyper. In January, the service was further extended to a web-app type platform.
Read: Shoprite profit climbs 14% driven by increasing demand in South Africa.
The subscription-based unlimited delivery service, Xtra Savings Plus, priced at R99 per month, continues to enhance customer loyalty, particularly among “high-value” customers. The subscriber base approximately doubled between December 2023 and December 2024.
The group maintains “record levels of customer retention and advocacy, despite intensifying competition.”
The competitive landscape includes Pick n Pay’s aggressive approach through its Pick n Pay asap! app and Takealot’s Mr D, as well as Woolworths’ assertive expansion with its Woolies Dash offering. Spar, a late entrant to the market, is also scaling up its Spar2U service.
Listen as Shoprite CEO Pieter Engelbrecht discusses the group’s results in this SAfm Market Update podcast with Dudu Ramela (or read the transcript here):
You can also access this podcast on iono.fm here.
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